A Beer Economics Conundrum (Updated)

July 22, 2010

Pabst Blue Ribbon is being sold in China... as an ultra-high end luxury drink:

In America it's called PBR and is the blue-collar/hipster beverage of choice. In China it's called Pabst Blue Ribbon 1844 and will run you $44 a bottle. Pretty steep for a beer whose biggest draw in the U.S. is the fact that it's, uh, really cheap.

In China, where the lager has been branded as a “world-famous spirit” and bottled in a much more alluring way, Pabst Blue Ribbon 1844 actually looks quite enticing. The advertising campaign for the beer even likens it to “Scotch whisky, French brandy, Bordeaux wine,” as they are all matured in wooden casks.

Another marked difference notable from the ad? There is a champagne flute-like glass accompanying the ostentatious bottle, which presumably is what you are to consume your beer from.

I don't understand how this can be sold for $44 a bottle. Can't somebody arbitrage that? What's stopping you from buying a whole bunch of PBR here in the U.S., shipping it to China and reselling it for $22 a bottle?

Update -- it's different stuff. A reader writes in:

I'm sure some angry beer enthusiast has already written you, but: I wrote the Gawker post that the TIME post links out to (here: http://gawker.com/5592399/pabst-blue-ribbon-will-run-you-44-a-bottle-in-china). Turns out that Blue Ribbon 1844 isn't actually the PBR we all know and tolerate. In fact, it's maybe the first "specialty beer" in mainland China. Here's a quote from the March issue of Modern Brewery Age:

Alan Kornhauser, who started his brewing career at Jos. Huber, and subsequently worked at Anchor Brewing Co., Portland Brewing Co., August Schell and elsewhere, now works for Pabst in China six months of each year. Interestingly, he reports that Pabst China has started expanding its horizons beyond Blue Ribbon. "We just produced China's first real specialty beer, an all-malt, reddish brown strong (15.7 plato) ale, dry hopped with Cascade (38 IBU) and aged in new uncharred American whiskey barrels," Mr. Kornhauser reports. "It's being bottled in a nice looking 720-ml brown bottle with an enamel label and it is called Blue Ribbon 1844, a reference to Pabst's founding date. It will only be sold in China, and it's going to sell for over $20 a bottle!"

Evan Osnos wrote a new post about it here. He talks a little bit about the culture of conspicuous consumption, etc.